Prime Minister Benjamin Netanyahu warned on Monday that Israel would hit back hard if Palestinian rocket attacks from Gaza resume, speaking just hours before the midnight expiry of a five-day ceasefire.

"We are ready for all scenarios... the army is ready to respond with force if
the firing (of rockets) resumes," he said in a meeting with defence minister Moshe Yaalon in Ashdod, a statement said.

Netanyahu's warning came as the clock ticked down to a midnight deadline in Gaza and as Palestinian and Israeli negotiators held crunch indirect talks in Cairo.

The aim is to broker a long-term arrangement to halt more than a month of bloody fighting which erupted on July 8, and that has killed 2,016 Palestinians and 67 on the Israeli side, most of them soldiers.

But Netanyahu said the offensive dubbed Operation Protective Edge, aimed at stopping rocket attacks from Gaza and destroying Hamas's attack tunnels, "will continue until its objective has been met... restoring calm and security" to Israel.